One of the major sources for acquiring bank-owned properties is REO (Real Estate Owned) Brokers. These real estate agents are commissioned by the bank to sell the bank’s foreclosed properties. They work with one or more asset manager(s) to rid the bank of its toxic assets. Developing relationships with these people is essential to your acquisition process.
REO Brokers: Your New Best Friends
The easiest way to find REO Brokers is to do a search in your city’s multiple listing service for bank-owned properties. Most MLS programs will allow you to search using “Foreclosure” as a criteria. Find the foreclosure listing and the agent’s info will be on the listing.
If, however, you are not a Realtor and don’t have access to the MLS, there are other ways to track these valuable assets down. Begin by checking out www.zillow.com and www.Realtor.com. Most Realtors will publish their listings to these websites to gain maximum expo- sure. In addition to checking out these sites, drive the areas in which you’re interested in buying. Look for properties that appear to be abandoned.
You’ll find yard signs with Realtor names and phone numbers. Many times the yard sign will also include the word “FOREcLOSURE” so you know for sure the property is bank owned.
How to get “in” with an REO Broker
Now that you’ve located a handful of REO Brokers, it’s time to make contact. While it’s true these guys are busy, it’s also true that they need to make a sale. Once they understand you’re the one to help make that sale happen, you will be viewed less as a pest and more like a legitimate buyer. Understand they deal with “buyers” who blow smoke all day long without ever having any in- tention of closing. You will need to prove your worth to warrant them spending any time on you.
In an ideal world, you’d like to be the first buyer they call when they’ve got a new listing. To do this, you’ll need to make it worth their time. Here are some tips:
- Offer double commissions. If you have a real estate license, forego taking any commission on the foreclosure you’re intending to purchase. You can say something like this when you send the offer: “You’ll notice that I’ve left the selling agent information blank on this offer. I’d like to offer you both sides of the commission.” Even if you don’t have your license, you can still make sure they get both sides of the commission by asking them to repre- sent you as the buyer.
- Do everything in your power to make things as easy on them as possible! This can be as simple as getting documents signed and back to them in a timely manner. Remember, your goal is to have them remember you fondly after this transaction.
- A thank you note or gift never hurt anyone. A simple thank you note is al- ways appreciated, and if you’d like to be remembered even more, why not send a gift? In the past I’ve sent REO Brokers out to dinner on my dime or gifted them with Apple’s newest toy (for instance, an iPod Shuffle).
Lastly, purchase multiple properties. This one will take time, but it’s the best way to be remembered. Show them that you can deliver and they will begin to bring you deals. But, remember, waste their time and you’re done.
(ADD FOR MLS DOMINATION)